Glass Half Full
In reviewing the Q3 FS and accompanying shareholder letter there is a lot going on. You can pick a part every detail if you wish but I see a lot of incredible things going on and huge potential.
Sales for the first 3 quarters = $3.2 million with net income of about $1.0 million or 31% of sales. If you add back the one time LAM 3(a)(10) expenses of $725 thousand, the net income for the first 3 quarters is $1.7 million or about 53% of sales, which is incredible and unheard of...
Accounts Receivable is growing and is now at $3.7 million. That could be a bit concerning by itself; however, Cash collected during that time period equals over $1 million. How many companies trading at $.002 collect over $1 million in cash in 3 quarters? Even more encouraging, $656 thousand of that was collected in the 3rd quarter alone. To me this demonstrates strong repeat sales because the dealerships have to pay up if they want more inventory. Additionally, the reason why ONCI can handle growing A/R is due to its 53% net income percentage (there are not many expenses associated with the A/R)
The increased investment in Cogosense is also a great sign, paying an additional $575 thousand during the quarter from internally generated profits and additional investment by our committed CEO.
Which brings up another point, have you looked at the Due to Related Parties? That number on the balance sheet has grown from $106 thousand in October 2016 to now about $1.6 million at 7/31/18. Talk about putting your money where your mouth is... Most if not all of his salary and commissions go back into the company which enables us to grow and pay off debt. He has even sold some of his personal shares and put the proceeds back into the company. I think it's admirable but some have interpreted him selling shares as a lack of confidence in the company, which could not be further from the truth.
For further proof of a great turn around, look at the shareholder's surplus or deficit. What was a deficit of $2.7 million in October 2016 is not a surplus of about $2.8 million. That is a $5.5 million increase of assets over and above liabilities in less than 2 years.
Also, in reading the shareholder letter accompanying the financial statements, the ONCI has so much potential going forward. A huge private label coming very soon and one in Turkey and another in Europe in the works. A 75% stake in an upstart Craft Cannabis company, the 6th leg with more details to follow, and rolling out BSafe Mobile to dealerships with Auto Nation and Car Max.
Anyone can find weaknesses or poke holes in penny stocks but when you objectively look at ONCI, few have as much profit and potential for long term growth as ONCI. I am a substantial shareholder so yes I am a little biased but SB has done an amazing job and I look forward to the long term appreciation of shareholder value and associated share price.
